The electric vehicle excise duty (eVED) will be charged on top of the current vehicle excise duty charge paid by all vehicles. The charge will equal 3p per mile for fully electric cars and 1.5p per mile for plug-in hybrids from 1.4.28. The average electric car driver covering 8,000 miles is expected to be charged £240 a year, roughly half the rate of fuel duty tax paid by petrol and diesel drivers.

How the scheme will work is subject to a consultation. Under the current proposal motorists will be required to estimate their mileage for the year ahead; pay a charge upfront (or split into smaller monthly payments); and submit their actual mileage at the end of the year. This will trigger a balancing payment if the estimate was too low, or a credit towards next year's liability if the actual mileage was lower than estimated.

Mileage checks will be performed annually by an accredited provider during the car's MOT or, for new cars that do not yet require an MOT, around their first and second registration anniversaries.

Other vehicle types such as vans, buses, coaches, motorcycles and HGVs as well as hybrid cars that use petrol or diesel as their sole external power source (ie those that do not plug in to charge) will be out of scope for the eVED.